Fidelity International (FIL) plans to exit its wholly owned China fund unit, two people familiar with the matter said, marking one of the biggest retreats by a global asset manager from the world’s second-largest economy.London-headquartered FIL, which manages US$1.18 trillion in client assets globally, is weighing a total retreat from its onshore fund unit three years after its launch, according to the two people who spoke on condition of anonymity because the exit plan is not public.A combination of fierce local competition, frequent leadership turnover and chronic struggles to build scale ultimately convinced global FIL executives that the China retail venture was untenable, the people said.
The logo of Fidelity Investments is displayed over a booth at the Web Summit digital trade show in Vancouver, British Columbia, Canada, on May 12.
The planned departure highlights the growing headwinds for foreign financial firms in China, with squeezed margins hampering expansion since Beijing allowed fully foreign-owned units in 2020, attracting six global asset managers to set up new onshore operations including Fidelity and BlackRock Inc.“China remains an important market for Fidelity International and we continue to believe it offers attractive long-term opportunities both for our business and for investors. There is no change to report on our strategy or market presence,” FIL told Reuters in a statement.
